Tuesday 24 October 2006
Government makes a difference for small business
The government is already acting on most of the latest recommendations of the Small Business Advisory Group, Small
Business Minister Lianne Dalziel says.
Lianne Dalziel today released the government’s response to the Small Business Advisory Group’s second report, which
contains 12 recommendations to assist small and medium enterprises (SMEs).
“I am pleased to say that in many instances we share a vision on how to improve the business environment for SMEs,”
Lianne Dalziel said.
Lianne Dalziel said many of the recommendations were either already being implemented or considered by government,
including:
- Instigating the Quality Regulation Review to ensure regulatory frameworks or their enforcement are not acting as a
barrier to growth;
- Instigating the Business Tax Review to look at ways of boosting New Zealand’s competitiveness and productivity;
- Simplifying and improving ACC forms to minimise compliance costs;
- Increasing ACC’s and IRD’s flexibility for dealing with disputed invoices or honest mistakes;
- Improving information around the Hazardous Substances and New Organisms (HSNO) Act;
Lianne Dalziel said the government has again rejected the group's call for a performance-based personal-grievance-free
probationary period for new employees.
"Employment law already allows for probationary periods to be entered into without taking away an employee's rights. I
am pleased that the advisory group has since produced a proposal to streamline personal grievance procedures, not as an
alternative to their report, but as a possible way forward. The government is now considering this proposal," Lianne
Dalziel said.
The Small Business Advisory Group comprises nine owners of small or medium businesses, and was set up to give this
important sector effective input into government policy development. The group released its second report to the
government in March.
Lianne Dalziel said the members of the Advisory Group had over the past three years delivered real benefits to small
businesses and to government policy-making.
"Some of our most creative ideas are coming out of the SME sector. We're determined to ensure the business environment
enables these people to get on with what they do best."
For a copy of the SBAG report and government response go to www.med.govt.nz/sbag
Lianne Dalziel's speeches and media releases are on www.beehive.govt.nz/dalziel
Q: Government response to SBAG 2nd report:
What Is SBAG?
The Small Business Advisory Group comprises nine people who own small and medium sized businesses (SMEs). Their purpose
is to give SMEs a greater voice in policy development and to advise Ministers of issues facing SMEs.
The members of SBAG are:
- Murray Cleverley, Timaru, CEO Economic Development Agency, meat processing;
- Peter Kitchen, Kaitāia, tourism sector, Māori business;
- Denise L'Estrange-Corbet, Auckland, fashion design and retail;
- Nigel McKinlay, Dunedin, footwear manufacturer;
- Lachlan McKenzie, Rotorua, farming;
- Cameron Moore, Christchurch, manufacturing;
- Alison Quesnel, Auckland, health products, business mentor;
- Robyn Reid, Nelson, aviation, economic development;
- Stuart Wilson, Wellington/Auckland, information technology.
The government greatly values the work and views of the first Small Business Advisory group. The current members have
agreed to stay on until the end of the year to enable the government to respond to their second report. Applications for
membership of the SBAG have been sought from people with extensive experience with small businesses, wide networks, and
good analytical and advocacy skills. Nearly 250 applications were received and are currently being considered.
Announcements should be made at the end of the year.
Why does SBAG produce a report?
Part of SBAG's function is to provide ongoing advice to government on any issues affecting SMEs. Mainly this is done out
of the public eye. However they decided in 2004 to produce a report setting out some key things they thought government
could do to improve the business environment for SMEs. The group’s second report was released in March 2006.
In introducing the idea of a regular report they were following the example of the Small Business Council in the United
Kingdom - the former Chairman of the Council met with SBAG early in 2005.
What were SBAG's recommendations in the second report and what is the government's response?
Recommendation 1: That the Government demonstrate that the quality of cost/benefit analyses contained in
Regulatory Impact Statements has improved by 30 September 2006.
Response: Improvements to the regulatory impact analysis and monitoring of cost compliance systems were covered in the
May 2006 Cabinet decisions on the Quality Regulation Review (Addresses recommendations 1 and 6).
Recommendation 2: That IRD and ACC develop, implement and communicate a strategy for dealing compassionately with
minor misdemeanours or unintentional mistakes.
Response: Changes are being made to ACC and IRD processes for dealing with minor misdemeanours and unintentional
mistakes.
Recommendation 3: That HSNO controls be made less complex and simpler to implement.
Response: Improved processes for HSNO controls took effect from 1 July 2006. The Quality Regulation Review (QRR) is also
considering the HSNO, HSE and ACC frameworks.
Recommendation 4: That the Holidays Act 2003 be re-visited, particularly the relevant daily pay clause, to reduce the
costs of complying with it.
Response: An independent evaluation found that both employers and employees understand the new law better than the
previous Act. The Department of Labour (DOL) is working on an on-line tool for assessing holiday entitlements. The
government has been subsidising small employers to use payroll intermediaries since 1 October 2006. .
Recommendation 5*: That the employment law be amended to provide for a performance-based personal grievance-free
probationary period of 12 months for new employees.
Response: Rejected because current employment law already allows for probationary periods to be entered into without
taking away employee rights. It would send the wrong signal on the importance of beginning and managing employment
relationships successfully.
*NB: Since publishing their second report the SBAG has suggested a streamlining of personal grievance procedures. This
proposal is attached in Annex 1 of the government's response and is currently being considered.
Recommendation 6: That all government business forms contain a time box in which the person filling out the form
indicates how long it took to complete (including research/ understanding time) and that the results and trends from the
information in these boxes are published.
Response: This is being addressed by Cabinet decisions referred to in the response to recommendation 1. Responding to
the publication of the SBAG report, ACC included a time box in its self-assessment form for the new Workplace Safety
Discount Scheme.
Recommendation 7: That Fringe Benefit Tax on business vehicles be simplified by moving it from the Fringe Benefit Tax
return to an adjustment in the employer’s income tax return.
Response: Consideration of further changes to Fringe Benefit Tax rules is being made as part of the business tax review
- SBAG will be consulted in that process.
Recommendation 8: That improvements to the presentation and information on ACC invoices, and their timeliness, be
urgently implemented.
Response: The invoices for self-employed people were simplified in August 2004, and similar improvement to employer
invoices will occur in 2007. ACC will continue to work with SBAG and other business groups to ensure the changes address
their concerns.
Recommendation 9: That the government run a Small Business Day Series in 2006.
Response: Meetings with small businesses are currently being held around the country as part of the Quality Regulation
Review.
Recommendation 10: That every year the Ombudsman target business audiences, as well as individuals, during his regional
visits, in order to allow SMEs to communicate specific concerns about regulatory enforcement actions by government
agencies and local authorities.
Response: The Chief Ombudsman has agreed to advise local business associations of Ombudsmans' visits to their region so
businesses can be alerted to the opportunity to raise any concerns.
Recommendation 11: That the government implements a programme that will help it better understand SMEs. That programme
should include appointing SME champions in government departments, requiring a senior manager scrutinise all
departmental regulations, and a public/private sector secondment programme.
Response: There are examples of departments developing an SME focus (small business units in the Ministry of Economic
Development and Department of Labour, industry group in the Ministry for the Environment and an SME champion in the
Inland Revenue Department). However, SBAG has recently completed a review of a sample of regulatory impact statements in
which an independent reviewer also raised questions about the capability of departments to understand and assess impacts
of proposed regulations on small businesses’ operations. This issue will be addressed as part of the Quality Regulation
Review.
Recommendation 12: That the government ensure basic enterprise education is part of the core curriculum.
Response: References to Enterprise Education and entrepreneurship have been included in the Draft Curriculum Discussion
Document released on 31 July 2006.
What happens next?
Work will continue to complete the work identified as being in progress in the report back. Ministers and officials will
continue to meet with SBAG and to consider their views of improvements needed to the business environment.
The website www.businessconsultation.govt.nz is available for businesses wishing to register to be consulted by
government agencies during the formulation of policy, or who have regulatory issues they would like to raise with the
government.
ENDS